COLUMN: No Tax Pledge takes a toll here, literally

Community columnist

Jan. 15, 2013

Written by

Chip Tappan

Community columnist

I think so, and the current deadlock over financing the new Brent Spence Bridge provides a reason close to home.

The pledge has been around since 1985, sponsored by Grover Norquist’s Americans for Tax Reform. It is sought of all state and federal legislators, as follows:

For members of Congress: “ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses, and TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”

For state legislators: “I will oppose and vote against any and all efforts to increase taxes.”

These pledges were signed in the 2011-12 Congress by all but six of 242 Republicans in the House and all but seven of 47 Republicans in the Senate.

I believe that the vast majority of Republicans in the Kentucky House and Senate have signed the pledge as well.

The pledge has served Republicans well politically as nearly all of them have used it in their election campaigns. Voters have gotten accustomed to the idea that Republicans will oppose all forms of tax increases. Many newly elected legislators owe their success in good part to the pledge.

It is a simple idea, which the conservative base and especially tea party supporters like a lot and has obvious voter appeal.

So why do I advocate doing away with it?

At both the state and local level the pledge has impeded progress on a number of tax matters for many years. In Washington it has been a major cause of gridlock because it allows no flexibility. It became an impossible goal in the “fiscal cliff” negotiations, and House Speaker John Boehner ultimately conceded the point.

A good example of its negative impact involves financing the Brent Spence Bridge. The new bridge could be funded by either an increase in the federal gas tax, the state gas tax, tolls or some combination thereof. Work to come to an agreement on a financing plan is now underway, and the pledge makes reaching one much harder than it should be.

Our federal and state legislators have opposed an increase in the federal gas tax for 20 years. The last increase was 1992; it is now 18.4 cents per gallon, or about 5 percent of the cost per gallon. There has been no change in their position. Yet many are wanting funds from the Federal Highway Administration (FHA) to finance most, if not all, of the cost for the bridge.

If Congress, starting with the leadership in both houses, would agree to increase the federal gas tax in exchange for federal financing of perhaps 80 percent of the bridge, wouldn’t this be a great victory for us?

The state gas tax could also rise by enough to finance perhaps the other 20 percent. In this way we would avoid the toll option. However, all legislators, federal and state, would have to renounce the pledge to do this.

Over the past 27 years, since the pledge became a major plank of Republican fiscal policy, we have “kicked the can down the road” on numerous problems that need a comprehensive solution. It has become a poor long-term strategy for Republicans.

Financing the Brent Spence Bridge has been discussed for years with no resolution. In the meantime, Louisville has recognized the need for tolling, and two new bridges are about to be built there.

A better strategy would be to agree to a tax increase (gas tax or tolls) in exchange for a large contribution from the federal government to build the bridge. If you charge a $1 toll, that would support a bond issue of more than $1 billion, enough to cover about 44 percent of the total cost.

A significant local contribution to the new bridge will be needed in order to get it built. The FHA will prioritize its support of interstate highway projects that cost big bucks by giving preference to those with the greatest percentage of local contribution. You don’t have to be a Washington bureaucrat to figure that one out.

Chip Tappan is a resident of Edgewood and president of Tappan Properties. Reach him at chiptappan@aol.com.